Reference no: EM132790486
Rescued Airlines Plan on Firing Employees Anyway
The Coronavirus pandemic has taken a devastating toll on U.S. airlines. Passenger traffic was down over 90 percent as of May 2020, with a measly average of 23 passengers on each domestic flight. This does not bode well for airlines facing significant payroll, rent, and maintenance expenses. In fact, major carriers American, Delta, Southwest, and United are losing between $350 and $400 million a day, even as they've slashed their schedules and grounded half their fleet at airports and desert strips.i
The U.S. government provided a $25 billion bailout of the airline industry in order to stem the bleeding. The bailout included grants and low-interest loans to assist airlines in paying hundreds of thousands of pilots, flight attendants, baggage handlers, mechanics, and others. In return, airlines agreed not to lay off or involuntarily furlough their employees, or to cut their pay, until October 1, 2020. "This agreement will fully support airline industry workers, preserve the vital role airlines play in our economy, and protect taxpayers," said President Donald Trump.ii
Experts, however, believe the bailout isn't protecting airline employee jobs; it's just postponing the inevitable. Airlines are planning massive job cuts-to the tune of at least 30 percent of their workforce-on October 1, once the bailout prohibition expires. United President Scott Kirby outlined his airline's plans in a May 2020 memo to employees: "If demand remains significantly diminished on October 1, we simply won't be able to endure this crisis as a company without implementing some of the more difficult and painful actions. These include decisions on involuntary furloughs, further reductions in hours, as well as other actions that will have an immediate impact on our people and their livelihood."iii
Indeed, with airlines continuing to burn through cash and a quick recovery no longer in the cards, it seems like time is running out for airline employees. "October 1 is likely to emerge as one of the darkest days in history for airline labour," J.P. Morgan Chase analyst Jamie Baker told the Financial Times.iv
Was the deal struck between the government and airlines to use taxpayer funds to bailout carriers when they plan on firing their employees anyway an ethical one?
Read the case below and answer the questions that follow.
1) Assume that airline CEOs believe that laying off 30 percent of their workforce to keep 70 percent employed is justified. Which ethical perspective supports this belief?
a. utilitarian
b. moral-rights
c. universalism
d. justice
e. ethical egoism
2) If airline management decides to lay off employees, the ________ perspective states that they should do so without regard for individual employee characteristics such as race, gender, and sexual orientation.
a. ethical egoism (individualism)
b. utilitarianism
c. human rights
d. universalism (justice)
e. moral-rights
3) Which of the following issues raised in the case is a legal, not ethical, one?
a. whether airlines should accept government funding when they plan on laying off employees anyway
b. if airlines should keep all their employees after October 1, and hope that conditions will improve, since they are all in this together and either everyone loses their job or everyone keeps it
c. whether Congress should be providing funds to airlines when it anticipates that they will let go of their employees anyway
d. if airlines should be receiving grants (which don't have to be paid back) or loans
e. whether Congress has the authority to provide taxpayer funds to airlines
4) If you believe a job is a fundamental right, what would you tell the airlines?
a. You should do what is in your company's best interest.
b. You should either keep all your employees or find other jobs for them somewhere else.
c. Go ahead and lay off people, but make sure you apply the same standards to everyone.
d. You should ensure that the greatest number of employees can keep their jobs.
e. Provide health insurance to those you lay off.